Acceptance in Lieu scheme and other heritage property reliefs

The following Private Client practice note provides comprehensive and up to date legal information covering:

  • Acceptance in Lieu scheme and other heritage property reliefs
  • What property may qualify for the AiL scheme
  • How the AiL scheme works
  • Interaction of reduced 36% IHT rate and AiL
  • Time limits and restrictions on the AiL scheme
  • Recent AiL cases
  • Interaction of the AiL scheme with other taxes
  • Gifts for national purposes and gifts to charity
  • What property may qualify for the gifts for national purposes exemption or the charity exemption
  • Schedule 3 bodies and institutions
  • More...

Acceptance in Lieu scheme and other heritage property reliefs

The Acceptance in Lieu (AiL) scheme allows those who are liable to UK inheritance tax (IHT) to apply to settle the tax by offering property in full or part payment of the IHT liability. Objects must be pre-eminent for their national, scientific, historic or artistic interest and HMRC and the Secretary of State must agree to the application. As with other heritage property reliefs, the aim of the AiL scheme is to ensure that pre-eminent heritage assets are retained in the UK for the public benefit rather than sold to private dealers and/or moved out of the country.

What property may qualify for the AiL scheme

In common with the conditional exemption from IHT, the AiL scheme requires the heritage property to qualify and be designated as pre-eminent or otherwise be accepted by HMRC as qualifying for the scheme.

Any of the following property may be accepted by HMRC in satisfaction of the whole or part of an IHT liability:

  1. any land (including any buildings on the land) as agreed with HMRC

  2. any objects which are or have been kept in a particular building:

    1. which has itself been accepted in satisfaction or part satisfaction of IHT

    2. which (or any interest in which) belongs to the Crown, the Duchy of Lancaster, the Duchy of Cornwall or a government department (or

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